Economy
Türkiye-UK trade deal could serve as global ‘example’: Envoy
A planned update to the free trade agreement (FTA) between the U.K. and Türkiye would serve as “a great example” for modern trade deals, according to the British consul general in Istanbul, Kenan Poleo.
The first round of negotiations on the updated agreement concluded positively, covering areas such as goods trade and sustainability, said Poleo, who also serves as the U.K.’s trade commissioner for Eastern Europe and Central Asia.
“The most exciting thing about this new free trade agreement is (that it is) an opportunity for the U.K. and Türkiye to set a great example for the whole world around what a modern free trade agreement between two important partners looks like,” Poleo said in a recent interview with Anadolu Agency (AA).
The next round of negotiations is expected later this year and will focus on developing a road map for expanded cooperation, particularly in services and innovation-driven sectors.
Trade between the two countries currently exceeds 27 billion pounds (approximately $36 billion), making Türkiye one of the U.K.’s largest trading partners, he said.
“Given the depth of our relationship, really, the sky’s the limit,” he added.
Describing trade relations between the two countries as “huge,” Poleo said Türkiye is now one of the U.K.’s largest trading partners, with the relationship having grown significantly in recent years.
“There isn’t a sector where we don’t see positive opportunities,” he said, citing clean energy, advanced manufacturing and mobility as key areas for collaboration.
The U.K. seeks to expand its global trade network post-Brexit, while Türkiye aims to diversify its economic partnerships amid shifting regional dynamics and supply chain realignments.
Eurofighter deal
One of the most recent milestones in bilateral cooperation was the signing of a memorandum of understanding during last month’s International Defense Industry Fair (IDEF) in Istanbul.
The deal paves the way for Türkiye to become a Eurofighter Typhoon operator, a move Poleo described as a “great example” of U.K.-Türkiye collaboration as “strategic and defense partners.”
“A third of those aircraft are going to be built within the U.K.,” he said. “It provides huge opportunities for both countries in terms of defense and security, but also economic growth.”
The Eurofighter is a multirole aircraft equipped with next-generation radar and enhanced air-to-air and air-to-ground combat capabilities.
Cooperation in offshore wind and nuclear power
He also pointed to growing opportunities in offshore wind and next-generation nuclear power.
“We have institutions like the Offshore Renewable Energy Catapult in the north of England, very close to where capabilities are,” he said.
“We’ve developed innovation capability and capacity that have allowed Turkish companies, who are looking to explore those opportunities globally and also in Türkiye, to come and become part of that ecosystem,” he explained.
The British envoy said the U.K. and Türkiye can achieve “world-beating” results by working together in offshore wind.
“There’s an opportunity for Türkiye to leapfrog and a lot of learning, and really develop some capabilities here that could be world-beating working partnership with those Turkish and U.K. companies,” he said. “I’m excited about that opportunity.”
Poleo also said there are opportunities for the two nations to collaborate on developing a regulatory framework that would allow Türkiye to explore more novel and innovative forms of nuclear power.
“There’s an opportunity for us to collaborate and learn from each other on our experiences,” he said.
As Türkiye aims to install 5 gigawatts (GW) of offshore wind capacity by 2035 and advances its first nuclear power plant in Akkuyu, in the southern province of Mersin, while also targeting 5 gigawatts of small modular reactor (SMR) capacity by 2050, the U.K. sees an opportunity to support these ambitions with its global leadership in offshore wind and decades of nuclear expertise.
Farewell to Istanbul
Poleo, who assumed his post in September 2021, is set to complete his tenure in early 2026.
Born in South London to a Turkish Cypriot family, he described his time in Türkiye as both a personal and professional high point.
“This was always my dream job,” said Poleo. “It is both a joy to have served here, but it’s also a tragedy for me that it has to come to an end.”
Reflecting on joint achievements, Poleo highlighted the growing strength of the U.K.-Türkiye business relationship, citing partnerships that span sectors from health tech to aviation.
Switching briefly in Turkish during his farewell speech, Poleo expressed satisfaction at improving his language skills, adding with a smile: “Ailemle dedikoduları anlayabiliyorum” (“I can now understand the gossip in my family”).
Calling Istanbul one of Europe’s greatest cities, Poleo said in Turkish: “Each morning, I wake up to a view of the Golden Horn. That’s a lovely detail for me. Some days, being a British diplomat in this country feels like a dream.”
Poleo first visited Istanbul at 21 as a student, recalling how he once stood outside the British Consulate building and imagined working there someday. “Incredible. I’m a fortunate man,” he said.
Tesla has unveiled its new Roadster sports car, which can thrust itself up in the air. But drivers shouldn’t expect to take it for a spin anytime soon.
Elon Musk’s car company debuted the latest bells and whistles of its second-generation Roadster, developed in collaboration with the CEO’s rocket company, SpaceX.
Chief among them, as shown off at a Thursday event, are a set of cold gas thrusters and a “multi-mode” suction system that can fling the car in the air for short spurts and spin the vehicle mid-flight.
The white two-seater vehicle drove upside down on a ramp using a suction system, turned in the air and landed using built-in thrusters. Later in the event, it used the thrusters to jump over a truck and other vehicles, twisting in the air during the maneuver.
Some watchers saw the collaboration as Musk drumming up interest in a merger of the two big companies he controls, an idea he has explored by discussing their overlap.
“Turns out the future does have flying cars,” Musk wrote on his social media platform X shortly after.
Thursday’s launch arrived after years of delays and anticipation around the new Roadster – and Tesla shares climbed 5% in premarket trading on Friday.
Still, Musk said production for consumers won’t begin until 2028.
And of course, these kinds of cars aren’t flinging themselves in the air on highways and streets just yet. There are ample regulatory hurdles for flying vehicles overall.
The fine print of the Roadster’s “rocket” feature on Tesla’s website notes: “Not approved for public road use.”
Tesla also didn’t immediately set a price tag on its latest electric vehicle, although the company nearly a decade ago quoted a base price of $200,000.
Tesla’s reservation page for the Roadster showed a “Performance” version of the vehicle requiring a $50,000 deposit and a “Thrust” version with “acceleration thrusters” requiring a $250,000 deposit. A “Rocket” variant, which Tesla says is “invite only,” is described as a single-seat model with a “full flight system.”
‘Most insane’ product demo ever
The reveal gives Tesla a showpiece car after years of missed Roadster deadlines, but it comes as the company shifts its focus to self-driving technology and robotics, and days before third-quarter results that analysts say matter more to investors.
“It was an engineering flex with no commercial value beyond embarrassing traditional car makers,” Gene Munster, managing partner at Tesla investor Deepwater Asset Management, said on X.
“The Roadster event is the latest example of why Elon can’t wait to bring (Tesla) and (SpaceX) together,” Munster said.
Musk has played down the car’s importance to Tesla’s finances, describing it in 2023 as a “small potato situation” that would not “move the needle in a major way financially.”
But the car still carries symbolic weight.
“Tesla does not currently have a halo car, or high-performance luxury vehicle designed to showcase an automaker’s best engineering and technology. The Roadster will be Tesla’s new halo car,” Morningstar analyst Seth Goldstein said in a note last month.
Viewers and witnesses gushed over the spectacle of the launch.
“That was the most insane product demo I’ve ever seen,” Tesla fan and investor Sawyer Merritt posted on X. “I just saw this in person, and I’m still asking how this wasn’t AI.”
‘Halfway to speed of sound’
The event at a SpaceX test site in McGregor, Texas, had all the elements of a classic Musk product reveal: dramatic music, smoke, mechanical hissing sounds and a launch countdown.
“This is the culmination of incredible work by Tesla and SpaceX engineers working closely together to make something that you haven’t seen in any movie,” Musk, wearing a silver Western-style belt buckle emblazoned with the Tesla logo, told a cheering crowd of enthusiasts and investors.
The Roadster can accelerate from zero to 97 kph (60 mph) in less than one second and can hit a top speed of over 370 kph, Tesla vehicle engineering chief Lars Moravy said.
“Definitely much faster than that,” an excited Musk said. “I think you’ve got to crack halfway to the speed of sound.”
The Roadster can also travel over 480 km (300 miles) on a single charge. That is less than half of what Musk promised in 2017, when Tesla first revealed a prototype of the second-generation Roadster and said that deliveries would begin in 2020.
The original Roadster, released in 2008 and on sale until 2012, was Tesla’s first-ever electric vehicle and used a Lotus Elise chassis. It helped change the world’s view of what an EV could be. The company has since been known for its Model Y and Model X SUVs and Model S and Model 3 sedans.
The reveal of the second-generation Roadster comes amid a sharp shift in Tesla’s focus to artificial intelligence-led self-driving tech and robotics, from manufacturing cars for human drivers.
This year, Tesla stopped selling Model S and X vehicles to make space for production of its Optimus humanoid robots. It also launched Cybercab – a two-seater robotaxi that comes without manual controls such as a steering wheel, pedals and mirrors.
Tesla is set to report third-quarter results on Oct. 21.
Sales of Tesla’s aging lineup of EVs have declined over the past two years, although high gas prices helped boost deliveries in the third quarter.
“The margin and cash flow numbers will carry far more weight with investors than anything they saw at the reveal,” said Josh Gilbert, lead analyst for Asia-Pacific at trading platform eToro.
The first reactor at Türkiye’s Akkuyu nuclear power plant is expected to achieve its first self-sustaining nuclear chain reaction before the end of this year, Alexei Likhachev, head of Russia’s state nuclear corporation Rosatom, said Friday.
Rosatom is building Türkiye’s first nuclear power station in the Mediterranean province of Mersin worth $20 billion. Its four reactors will have a combined installed capacity of 4,800 megawatts (MW). Once all units are operational, it is expected to supply about 10% of Türkiye’s electricity demand.
Ankara plans to construct two additional plants, one in Sinop on the Black Sea coast and one in the Thrace region.
Türkiye has said it’s still in talks with Canada, China, Russia and South Korea on the projects.
LNG cooperation with Novatek
Separately on Friday, Energy and Natural Resources Minister Alparslan Bayraktar said he discussed cooperation possibilities in the liquefied natural gas (LNG) field with the chair of Russia’s largest LNG producer, Novatek, during a meeting in Moscow.
Bayraktar said on the social media platform X that Ankara would continue taking steps to increase Türkiye’s energy diversity and consolidate its supply security.
Türkiye is one of Europe’s largest gas markets, having consumed 59 billion cubic meters last year. The country relies on imports for a majority of its gas needs and has, in the last two years, inked long-term supply deals with major LNG producers, but has no such agreement with Novatek.
Türkiye is expected to account for about 20% of demand for new passenger aircraft in Europe and the Commonwealth of Independent States (CIS) over the next 20 years, requiring 1,800 new aircraft as passenger traffic grows, a senior Airbus executive said Thursday.
Antonio Da Costa, Airbus vice president for market analysis and forecast, said the number of flights taken annually per person in Türkiye was expected to triple to 3.1 by 2045, surpassing the regional average of 2.4.
“We expect to see the need for Türkiye as a whole, 1,800 new aircraft to renew the fleet and especially grow at the rate that’s expected,” Da Costa said, adding that passenger traffic in the country was expected to grow by around 4.5% annually over the next 20 years, compared with 2.9% for the wider region.
“Our expectation is that the fleet of aircraft in Türkiye overall, throughout all the airlines, will more than double over the next 20 years,” Da Costa said.
According to Airbus’ latest Global Market Forecast, Europe and the CIS region will need 8,190 new passenger aircraft by 2045, including 3,600 for growth and 4,590 for fleet renewal.
Da Costa said Istanbul’s position as an international connecting hub continued to strengthen, driven by strong tourism demand and transit traffic.
Asked about the impact of the conflict in the Middle East on aviation demand, Da Costa said Türkiye had benefited from traffic diversions away from parts of the Gulf region, attracting more tourists and connecting passengers.
“We do see an opportunity… there’s more incoming tourists and more connecting passengers coming through Türkiye due to the conflict in the Gulf,” he said.
While expecting regional tensions to ease over time, Da Costa said he believed the additional traffic flowing through Türkiye would support the country’s longer-term growth.
Engine maker CFM International said Friday it had signed a memorandum of understanding (MoU) with Turkish Airlines covering the purchase of more than 300 LEAP-1B engines, including spares.
The engines will power the 100 firm and 50 optional Boeing 737 Max aircraft the national flag carrier announced in September, seeking to bolster its short- and medium-haul operations.
Alongside new engines, a long-term services agreement will cover Turkish Airlines’ entire LEAP-1B fleet, including engines already ordered and delivered, spares, engines on leased aircraft and those tied to potential options.
In total, the agreement spans more than 600 LEAP-1B engines operated by the airline and its subsidiary AJet.
New MRO facility in Türkiye
The MoU also includes a material services agreement to support an engine maintenance, repair and overhaul (MRO) facility in Türkiye.
The facility is meant to strengthen the engine maintenance capabilities of Turkish Technic, the airline’s maintenance arm, and allow it to offer comprehensive maintenance services.
Turkish Airlines currently operates 96 Boeing 737 Next Generation aircraft powered by CFM56-7B engines, and 79 Boeing 737 Max aircraft powered by LEAP-1B engines. Both figures include the AJet fleet.
“This new step with CFM will support our growing fleet, network, and operational efficiency,” said Murat Şeker, chair of the board of Turkish Airlines.
“We are also pleased to strengthen our partnership with CFM through a comprehensive set of services, providing the expertise, reliability, and long-term support needed to develop our LEAP MRO capabilities alongside a long-standing partner,” Şeker noted.
Turkish Technic CEO Mikail Akbulut said the agreement will enable the company to provide comprehensive maintenance operations for the LEAP engine.
“As Turkish Technic, we will continue to invest in engine maintenance services as well as our aircraft and component maintenance capabilities in line with our strategy,” Akbulut said.
‘New milestone’ in partnership
Olivier Andries, CEO of Safran, one of CFM’s two parent companies, described the MoU as a “new milestone” in a relationship with Turkish Airlines spanning nearly four decades.
“It reflects our shared ambition to support the airline’s continued growth and fleet expansion,” he noted. “The MoU demonstrates our broader commitment to an open MRO ecosystem, which provides airlines with flexibility and competitive services to improve operational performance and manage costs effectively.”
Lawrence Culp, Jr., chair and CEO of GE Aerospace, CFM’s other parent company, said GE was proud to partner with an airline that flies to more countries than any other.
“Putting its trust in CFM to provide highly reliable and efficient engines to support the growth of its Istanbul network and engine MRO capabilities is a responsibility we take seriously,” he said.
CFM noted that in the 10 years since the LEAP engine entered service, it has delivered more than 10,000 engines, which have accumulated over 100 million flight hours.
Türkiye’s 2027 budget will aim to support disinflation while strengthening investment, employment and exports, Vice President Cevdet Yılmaz said Friday.
The proposal, which includes spending of almost TL 27.28 trillion (about $550.8 billion), is ready to be sent to Parliament.
Yılmaz spoke at a ceremony to present the plan, which he called a “budget of resilience, prosperity and transformation,” prepared in the face of difficult regional and global conditions.
Growth and employment
The Turkish economy has kept growing even as global financial conditions tightened, external demand weakened and cost pressures rose, Yılmaz said, adding that the effects of weaker foreign demand and energy costs were limited.
Stronger growth among trading partners would create opportunities for exports and support balanced expansion, he said.
The government expects growth to rise to 4.2% in 2027 from a projected 3.3% this year, as the global outlook improves and external demand recovers. The economy grew 3.7% in 2025.
Under the Medium-Term Program (MTP), growth should accelerate gradually to 5% in 2029 through policies focused on productivity, technological transformation and innovation.
For 2027, employment is expected to rise by 657,000 people and labor force participation to reach 53.4%. Unemployment is forecast to fall to 8% from a projected 8.1% in 2026.
Inflation
The underlying trend in inflation continues to improve despite fluctuations in energy and commodity prices, Yılmaz said. Annual inflation, which fell below 30% in September, is forecast to end this year at 28.4% and decline to 21% by the end of 2027.
“Price stability is the fundamental priority of our program,” he said. The medium-term goal, he said, is lasting single-digit inflation, helped by supply-side policies, notably in social housing and food.
Deficits and debt
The government now expects this year’s budget deficit to come in at 3.1% of GDP, below the initial 3.5% projection, as revenues are running above expectations.
For 2027, Yılmaz projected the deficit at 3.5% of GDP, or $78.1 billion, which would fall to 2.8% excluding earthquake-related spending. The budget is expected to maintain a primary surplus next year.
Türkiye’s EU-defined general government debt declined to 22.3% of GDP in the second quarter from 23.1% in the first. Yılmaz described low public indebtedness as an important advantage amid global uncertainty.
Trade and external balance
The current account deficit is projected at 2.6% of GDP this year, which Yılmaz called manageable despite a temporary rise caused by the Iran war. The government expects it to fall below 2% next year.
Türkiye will continue policies to boost exports, strengthen energy supply security and reduce reliance on energy imports, Yılmaz said.
Goods exports rose 5.2% year-over-year to $211 billion in January-September, bringing the 12-month total to a record $283.7 billion.
Medium-high- and high-technology products made up 44% of exports, up from about 28% in the early 2000s.
Total goods and services exports are expected to reach $410 billion this year, said Yılmaz.
Housing and rents
Yılmaz said the budget will raise urban transformation spending by 176% to TL 276 billion and speed up social housing construction for low-income people, people with disabilities and newly married young people.
The government will also expand social housing and rental social housing to limit rent increases and meet housing needs. Support for social housing finance will rise 150% to TL 250 billion.
Earthquake reconstruction spending over 2023-2026 totaled $109 billion at current prices, equivalent to $104 billion, Yılmaz said, with 455,357 independent units completed and delivered.
Expenditures
The proposal projects expenditures of almost TL 27.28 trillion and revenues of TL 23.41 trillion, with national income expected to reach $2.24 trillion.
Interest spending is projected at $80.2 billion, personnel at $143.7 billion and current transfers at $206.7 billion.
By economic category:
Current transfers: TL 10.24 trillion Personnel: TL 7.12 trillion Interest: TL 3.97 trillion Goods and services: TL 2.18 trillion Capital spending: TL 1.85 trillion Capital transfers: TL 750 billion Lending: TL 613 billion Reserve appropriations: TL 542 billion
Selected sectors and programs:
Education: TL 2.46 trillion Health: TL 2.13 trillion Social assistance and support: TL 1.34 trillion (4.9% of the budget) Real sector support: TL 658 billion, excluding agricultural loan subsidies Electricity and natural gas support: TL 605 billion, up 62% Employer social security premium support: TL 351 billion Care support for elderly and disabled people: TL 132 billion Birth grants: TL 84 billion
Revenues
Value-added tax: TL 5.68 trillion Income tax: TL 5.53 trillion Special consumption tax: TL 3.28 trillion Non-tax revenue: TL 3.50 trillion Other taxes: TL 3.18 trillion Corporate tax: TL 2.22 trillion
President Recep Tayyip Erdoğan said Friday that Türkiye is addressing the fund turmoil in line with its priorities, warning that those who multiplied small sums through market tricks would be made to pay.
Erdoğan said Türkiye was confronting a problem that had resurfaced in a certain part of the fund market, and that the government had brought it under control through decisive steps taken since Sept. 17.
The crisis erupted after several funds last month said they could not meet investors’ redemption requests during a market sell-off, prompting a wide investigation into suspected price manipulation in a number of thinly traded stocks.
The Capital Markets Board (SPK) suspended trading in 131 funds run by seven asset management companies and placed them into liquidation, affecting nearly half a million investors. The government said it aimed to complete the liquidation of half of the funds by the end of this week.
Prosecutors have issued asset freezes and travel bans and have arrested more than 80 people, including the top executives of the asset management companies.
Erdoğan said the government had quickly set up a Fund Coordination Board to oversee the liquidation.
“We are carrying out the operation with the care of a surgeon,” he told an event in Istanbul.
Repaying investors
Erdoğan said the authorities were handling the issue according to three priorities.
The first priority, he said, is for the savings in the funds being liquidated to be paid to their owners as quickly as possible. He said payments under ordinary liquidation began last week and have continued without problems.
For extraordinary liquidations, interim payments will begin once the bill submitted to Parliament becomes law, he said.
Manipulators to be held to account
The second priority, Erdoğan said, is to deal in court with those who made unjust gains through manipulation. He said this is being carried out with the judicial process in mind, and that investigations are deepening in light of new information and confessions.
He contrasted those people with ordinary workers and business owners. “My exporter brother travels country to country to sell one more container, my industrialist brother works with great devotion despite the ring of fire around us, my merchant and tradesman brothers go to extraordinary lengths to earn honestly,” he said.
Against that background, he said, he would show no tolerance for people who multiplied TL 3 into TL 10, TL 20 or TL 30 in just three to five months through market trickery, and that they would be made to pay for their excessive gains.
Protect markets
The third priority is to manage the process without damaging the capital markets, Erdoğan said. He said the government had been careful from the first day, drawing a clear line between opportunists and investors.
He said the opposition and what he called “hired-gun” press outlets had not shown the same care.
Warning against ‘criminalizing’ markets
Erdoğan said ignoring the problem in part of the fund market would be wrong, but so would using it as cover to attack Turkish capital markets and scare investors away. “We cannot welcome the criminalization of our entire capital markets over the fund issue,” he said.
He said such an approach would hurt not only the capital markets but also the real sector, because capital markets act as a financial bridge between savers and businesses.
Erdoğan said the problem had arisen in only 4.6% of the total number of funds. Turning that into an attack on all capital market instruments, he said, “would amount to undermining the Turkish economy and sabotaging our country’s path to development.”
“No one – whether a politician or a journalist – has the right to do this. And we will not tolerate such opportunism.”
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